BAMA, Nigeria, Feb 20 (Reuters) - Gunmen from Nigeria's Islamist Boko Haram sect killed 98 people in the northeastern town of Bama on Wednesday, residents there said after burying their folk, more than double the figure given by police a day earlier.

Gunmen stormed the town in the early hours of Wednesday, firing on a school, shooting or burning to death dozens of people and trashing the palace of a traditional ruler of one of West Africa's oldest Islamic kingdoms. Police had initially put the death toll at 47.

The area of the attack was a wasteland of burnt buildings that still smelt faintly of charred flesh, according to a Reuters journalist who toured the scene with local officials.

Women and children could be seen gathering what few possessions they had from the ashen wrecks of their houses, many of them carrying them off on their heads as they trekked out to find somewhere else to shelter.

"We recovered 98 bodies that have already been buried since the attack," Akura Satomi, a pro-government civilian militia leader responsible for security in the town, told Reuters.

That made 200 killed this week in just two attacks. The insurgents, fighting for an Islamic state in northern Nigeria and posing the main threat to Africa's top oil producer, seem to have adopted a tactic of maximum civilian casualties.

On Sunday the Islamists killed 106 people in the village of Igze, one of their deadliest assaults so far. That prompted the Borno state governor to say the rebels were better armed and motivated than government forces, a charge the military denied.

The United States condemned that attack as "senseless".

President Goodluck Jonathan ordered extra troops into northeast Nigeria last May to crush Boko Haram, which wants to create a breakaway Islamic state in the largely Muslim north.

But the offensive, backed by air power, has so far failed to crush the rebellion. The government's co-opting of poorly armed civilian militia has also spurred massive Boko Haram reprisals against civilians. (Writing by Tim Cocks)

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